exploration | drilling | production … chemicals: increase drilling speed, efficient cuttings ......
TRANSCRIPT
THE BLACKSHARKWELLBORE INTERCEPT
SYSTEM BY
FEBRUARY 2017 EXPLORATION | DRILLING | PRODUCTION
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m THE BLACKSHARKWELLBORE INTERCEPT
SYSTEM BY
FEBRUARY 2017 EXPLORATION | DRILLING | PRODUCTION
ISSN 1757-2134
CCoontentsntents February 2017 Volume 10 Issue 02
5539
Copyright © Palladian Publications Ltd 2017. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK. Images courtesy of www.shutterstock.com.
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Front cover
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03 Comment
05 World news
10 Looking ahead in AsiaMichelle Gomez, Douglas-Westwood, provides an overview of the upstream
industry’s prospects in Asia.
13 Squeezing value from well dataMario Chiaramonte, Alberto Martocchia, Andres Matheson and
Alan Morrison, Geolog International, describe how surface logging can
provide cost savings and drilling efficiency through the use of innovative
interpretation models and modern technology.
19 Fighting against frictionAref Alali, Rubicon, USA, investigates downhole friction reduction technology
and explains how a new axial-vibration tool can help operators in extended
reach wells.
23 Addressing drilling challengesRoar Malt, Eric Claudey and Behzad Elehifar, Enhanced Drilling, Norway,
explain how the latest generation of dual gradient and managed pressure
drilling technologies are increasing safety and certainty while enabling
operators to ‘drill the undrillable’.
29 Advancements in automationJan Einar Gravdal, IRIS, Norway, introduces a research infrastructure for
drilling automation.
31
This feature showcases technologies designed to handle the harshest
conditions faced by the global oil and gas industry. Contributions come
from:
GustoMSC –Staying stable in harsh environments – Rutger Baan,
demonstrates how jack-ups and semisubmersible rigs have been adapted
to withstand the harshest of environmental conditions.
Oliver Valvetek – Futureproofing subsea valves – Paul Shillito explains
how the evolution of design, production and testing processes is allowing
valves to keep pace with industry demands.
39 Automated operationsAngelo Calderoni, Drillmec, explains how automated operations are
improving drilling standards and efficiency.
43 Remediating wellbore damageEnrique Proaño, Cudd Energy Services, and Dr. Neeraj Khanna,
Robert Picek, and Ben Whyatt, Bio-Cide International, describe a new
approach to remediating wellbore damage in fractured wells.
47 Getting a breakdown on biocidesCameron Campbell, Mike Hurd, and Angela Cooper, Kemira, investigate
preservative biocide usage across the full spectrum of oilfield operations.
51 Delving deeper into DCTDAndrew O’Brien, AnTech, UK, explains why DCTD applications are so
relevant to today’s oil and gas industry.
55 Overcoming decommissioning diffi cultiesJohn Fraser, Coretrax, UK, explains how innovative technology is the key to
lowering well abandonment costs.
57 Safety paysOilfield Technology correspondent, Gordon Cope, explains that while
placing a value on safety in the oil and gas industry is a complicated
business, new software is making it easier.
61 Making HSE manageableSimon Rooks, Tyco, discusses the importance of asset management when
it comes to health and safety in the oil and gas industry.
Set your sights. Labrador Sea
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ready LAS+, reports, directional surveys, check-shot surveys and digital mud logs for 32 wells selected from our overall
East Canada database of almost 800 wells. These data may be purchased individually as well packages, or as a bundle with
seismic or other TGS products.
TGS has also completed a series of interpretation studies integrating TGS’ extensive data library of offshore East Canada,
including a regional Sequence Stratigraphic and Play Fairway Analysis study, Post Well Analysis Study, and a Seismic
Interpretation study focused on NL01-LS area.
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Comment February 2017
David Bizley, Editordavid.bizley@oilfi eldtechnology.com
February 2017 Oilfield Technology | 3
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A s I write this, Donald Trump has been President of the
United States for less than a month. Even so, after a rapid
succession of executive orders, political appointments, and
typically frank ‘tweets’ from the Commander-in-Chief himself, a
seismic shift in US policy on almost all levels has already begun.
Many of these developments cover areas well beyond the scope
of this publication, such as healthcare, immigration, and infrastructure. Yet it was on just
his fourth full day in office that President Trump made some of the most significant (or at
least, highly politicised) changes that the US energy industry has seen in years when he
signed executive orders to advance the construction of the Keystone XL and Dakota Access
oil pipelines. Whilst at first glance, this might seem like a blessing for an industry that has
had to endure its most severe downturn for decades, there could be a fly in the ointment.
When completed, the aptly named Dakota Access pipeline will bring crude oil produced
in the prolific shale fields of the Bakken down to the US Gulf Coast, helping US producers
get their product to market more quickly and benefitting pretty much everyone involved.
The long-term economic benefit of this pipeline seems pretty clear-cut; Keystone XL,
however, looks like a rather different story. Aside from the initial construction and
manufacturing work, the pipeline mostly appears to benefit Canadian producers looking
for easier access to Texan refineries. This in itself is fine, but the worry is that Keystone XL
would also open up export options for Canadian crude to reach non-US markets, which is
far from ideal from a US energy security perspective.
Whatever the benefits end up being, it’s now effectively guaranteed that after
significant delays, particularly in the case of Keystone XL, these pipelines will be
completed. Donald Trump is certainly a President who seems to get things done.
Speaking of getting things done, OPEC’s November decision to cut its output from
the start of 2017 continues to bear fruit. As prices remain fairly steady around US$55, US
shale firms are gradually beginning to ramp up production and investment once more. The
Permian Basin in West Texas has become the epicentre of this tentative recovery with land
purchases and deals in the region accounting for 39% of all such deals across the country.1
Whilst the growth here is a positive sign, the Permian is fairly unusual in that it already
has significant existing pipeline infrastructure, a large pool of labour and expertise, and
warmer winters that allow for year-round work.2 These advantages bring the cost of
operations down and enable companies to work at a lower break-even price – the rest of
the country is likely to need closer to US$60 before seeing the same kind of growth.
That rise to US$60 may occur sooner than expected as the US seeks to impose new
sanctions on Iran in the wake of a recent missile test3 – Iran’s return to global markets
after previous sanctions ended in early 2016 weighed heavily on oil prices and was a key
driver behind the sudden drop to below US$28/bbl in February that year. So, although
some hard times may still lie ahead for the upstream industry, it looks like the worst might
just be over.
References1. ‘As oil recovers, U.S. firms descend on the Permian Basin in West Texas’ - http://www.reuters.com/
article/us-usa-oil-permian-insight-idUSKBN15G3F6 2. Ibid.3. ‘U.S. to issue new Iran sanctions, opening shot in get-tough strategy: sources’ - http://www.reuters.com/
article/us-iran-usa-idUSKBN15H253
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World news February 2017
In brief In brief
February 2017 Oilfield Technology | 5
Weatherford and Nabors form alliance for integrated drilling solutionsWeatherford and Nabors Industries have announced that they have signed a non-binding
Memorandum of Understanding (MOU) to form an alliance focused on delivering enhanced
drilling solutions to the oil and gas land market in the lower 48 states of the United States.
The MOU states that Weatherford will bring well construction expertise, managed
pressure drilling (MPD) solutions, directional drilling capabilities and drilling hardware, as
well as associated software applications and engineering personnel. Nabors will bring its
fleet of MPD-ready® SmartRigs™ and land-optimised measurement while drilling (MWD)
systems, together with its performance drilling software applications, automated rig
equipment and proprietary control systems.
“We are very excited about the opportunity to strengthen our capabilities in the largest
land market by jointly leading the creation of innovative integrated drilling solutions with
Nabors,” said Krishna Shivram, CEO for Weatherford. “The early entry into this emerging
market will create a strong, new sales channel for our company, while allowing us to secure
market participation in a new service model increasingly demanded by our clients.”
Anthony Petrello, CEO of Nabors stated that “We are pleased to jointly present to the
market a broader scope of activities, while accelerating the introduction of a unique offering
that, we believe, can more efficiently and cost effectively be delivered to operators through
our new SmartRig platform.”
UK subsea sector to increase exportsBritish subsea companies are expecting
to increase overseas activity in the next
12 months, according to a survey conducted
by industry body, Subsea UK.
Of the 300 member companies
surveyed, 27% predict exports to increase by
50% or more in 2017. More than half (56%)
expect overseas sales to increase between
1% and 49% with only 17% not expecting
any increase in export revenues.
A third of companies surveyed do not
yet know what effect Brexit will have on
their export plans, with 49% believing that it
will have no impact on their plans.
By comparison, 32% expect domestic
revenues to remain static in 2017 while
22% expect domestic sales to decline.
The majority of those expecting domestic
revenues to increase forecast between 10%
and 30% additional revenues from the UK
Continental Shelf. Export sales currently
account for over half or more of the annual
turnover of 32% of respondents.
Oceaneering signs E-ROV contract with StatoilA subsidiary of Oceaneering has been
awarded a technology development
contract by Statoil. The contract provides
for the development, manufacturing,
testing, and mobilisation of a self-contained,
battery-powered work class remotely
operated vehicle (E-ROV) system deployed
on the seabed. The system will interface
with Oceaneering’s onshore Mission Support
Center via a 4G mobile broadband signal
transmitted from a buoy on the water’s
surface, without a surface vessel required
onsite.
Development, manufacturing, and
pool testing will commence immediately in
Stavanger, Norway. An offshore mobilisation
test of the system is scheduled for May
2017. During the test, the E-ROV system will
be deployed and recovered from an IMR
vessel at the Troll field in the North Sea.
The system will perform specified subsea
operations while continuous, uninterrupted
control is maintained from onshore.
India The Indian government has announced
plans to merge its state-controlled oil
and gas companies to create a new
international company that can compete
more effectively on a global stage.
According to the Financial Times,
if ministers were to merge the eight
largest of India’s 13 state-controlled
companies, it would result in a company
with a market capitalisation of over
US$100 billion. In comparison, BP is
valued at US$116 billion.
India’s Finance Minister, Arun Jaitley
commented: “We see opportunities to
strengthen our central public sector
enterprises through consolidation,
mergers and acquisitions [...] It will
give them capacity to bear higher risks,
avail economies of scale, take higher
investment decisions and create more
value for the stakeholders.”
Australia TAG Oil Ltd has announced that it’s wholly
owned Australian subsidiary, Cypress
Petroleum Pty Ltd., has closed the
purchase of 100% interest in Petroleum
Lease 17 (PL 17) from Southern Cross
Petroleum & Exploration Pty Ltd.
PL 17 is an oil and gas production
permit and high-value exploration
acquisition that covers 104 km2
(25 700 acres) in the Surat Basin, one
of Australia’s first producing basins. It
is located in a light-oil discovery trend,
and is on trend with the Moonie oilfield,
which has produced approximately
25 million bbls to date. PL 17 contains
two undeveloped oilfields, the Bennett
and Leichhardt fields, and the production
permit area is largely unexplored despite
the proven and significant oil and gas
potential.
This is TAG Oil’s second acquisition
since the beginning of 2016.
World newsFebruary 2017
Diary dates Diary Diary dates
To read more about these articles and for more event listings go to:
Web news Web news highlightshighlights
www.oilfieldtechnology.com
6 | Oilfield Technology February 2017
Flexitallic unveils new offshore corrosion sealing technology.
Harbour Energy to lead acquisition of Shell UK North Sea Assets.
CCS appoints new business development and advisory manager.
NEL to Lead Multiphase Flow International Standard Development.
TGS announces new US GoM projectTGS has announced the Otos multibeam
and seep study project in the US Gulf of
Mexico (GoM).
Acquisition of the multibeam survey is
underway and is the first stage of a seep
and geochemistry programme covering
the US GoM. The survey is designed to
mirror the Gigante multibeam and seep
study in the Mexican GoM, conducted
in 2016. The new programme will cover
approximately 289 000 km2 and include
250 cores with advanced geochemistry
analysis.
TGS will continue to work with
the same acquisition providers as in
the Mexico programme, Fugro and
TDI Brooks. Final results in all areas
should be available in late 2017.
The programme will “provide new
insight into the distribution of different
source rock geology throughout the US
GoM and link this in a consistent fashion
to the recent successful survey in Mexico”,
commented Kristian Johansen, CEO of
TGS.
Charter extension for Bibby TopazBibby Offshore has announced the
long-term extension to the charter of
its dive-support vessel Bibby Topaz,
owned by Volstad Maritime. The terms
and conditions of the extended charter
arrangement have been adjusted to
reflect the current market environment
and are now based on a more mutual
sharing of risk and reward.
The extension allows Bibby Offshore
to maintain and grow the group’s market
share in the North Sea DSV market. The
Bibby Topaz has been a core part of the
group’s fleet since its delivery in 2008, and
has been identified as the best technical
and commercial option for the group.
The new contract allows exclusive and
uninterrupted access to this asset until
31 December 2019, with options to further
extend the charter to the end of 2024.
Howard Woodcock, CEO of
Bibby Offshore, stated that the extension
would allow the group to continue to
deliver comprehensive support for clients
in this region.
21 - 23 February, 2017
IP WeekLondon, UKE: [email protected]
22 - 24 February, 2017
Australasian Oil & GasPerth, AustraliaE: [email protected]
14 - 16 March, 2017
SPE/IADCThe Hague, The NetherlandsE: [email protected]
29 - 31 March, 2017
OMC 2017Ravenna, ItalyE: [email protected]
02 - 05 April, 2017
AAPG ACEHouston, USAE: [email protected]/2017
Statoil awards hook-up contract for Johan SverdrupAibel and Aker Solutions have, on behalf of the licence partners, been awarded contracts
for hook-up and commissioning assistance for the Johan Sverdrup field centre, Phase 1.
The contracts have a total value of slightly less than NOK 1.3 billion, excl. options.
The scope of work for the riser platform accounts for an estimated 70% of the total scope
committed in both contracts.
“These contacts are the last construction contracts in Phase 1 of the Johan Sverdrup
development. The competent supplier team now in place will help us develop a project
for several generations on the Norwegian continental shelf. Norwegian suppliers have
demonstrated competiveness, and have together landed more than 70% of all awarded
Johan Sverdrup contracts,” says Margareth Øvrum, Statoil’s executive vice president for
Technology, Projects and Drilling.
Aibel has been awarded the contract for hook-up and commissioning of the drilling
platform on the Johan Sverdrup field centre in 2018. The contract includes an option for
hook-up and commissioning of the processing and accommodation platforms in 2019.
Aker Solutions has been awarded the contract for hook-up and commissioning of the
riser platform on the field centre in 2018. The contract includes an option for hook-up and
commissioning of the processing and accommodation platforms in 2019.
Preparations start immediately. Kicking off in the summer of 2018 the hook-up work
offshore represents the final and crucial phase prior to first oil on the Johan Sverdrup field.
In this phase the jackets, platforms, wells, subsea equipment, export pipelines and power
from shore will be hooked up to form a fully functioning field centre that will come on
stream in late 2019.
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8 | Oilfield Technology February 2017
February 2017World newsRed Wing Shoe Company to extend global reachThe regression of global oil and gas production over the past two years has been difficult for
the industry – with the impact being felt not just by producers, but the secondary market too.
As a result, many O&G businesses are stricken by significantly reduced crude oil production
and, in some cases, the abandonment of certain key service and supply partners important to
employee safety and productivity.
“Many personal protective equipment providers have either scaled back or entirely pulled
out of the market this past year,” said Paul Olson, managing director of the Middle East, Asia,
Africa, Russia & CIS for Red Wing Shoe Company. “IOCs, NOCs and Service companies are
understandably anxious of their PPE supply chain. There are signs HSE and Procurement
officials can specifically look for.”
Among those he cites are delayed shipments of a week or more, lack of in-country
presence, inept Customer Experience professionals not indigenous and familiar with the
nuances. Olson said that, in general, the committed providers are the ones able to alleviate
rather than add work to O&G entities. Red Wing, for example, supplies companies’ in-country
via local distribution hubs that offer a full service platform. Such items as: Identifying the
correct PPE for the work scope, tracking and reporting individual consumption, product life,
replacement timelines, quantities, consolidating invoicing, product care and much more. If a
PPE provider does not offer this or is not investing in a full-service infrastructure, the IOC/NOC
and service companies will spend more valuable time administering PPE contracts than on a
focused approach to their core business.
“Despite the past year’s trend, I can say with certainty Red Wing is committed to the
sector with its partners through thick and thin,” adds Olson. “We’re built on a legacy of work
done right, committed to solutions for workers wherever – and whenever – they operate.”
InterOil: Antelope-7 side track drilling updateOn December 22, InterOil announced that
the initial Antelope-7 well had reached
2127 m (6978 ft) measured depth below
rotary table. After encountering drilling
difficulties in the Orubadi Formation,
Total E&P PNG, the operator of Petroleum
Retention License 15 in the Gulf Province
of Papua New Guinea commenced the
Antelope-7 side track appraisal well.
On January 31, 2017, according
to information provided by Total, the
Antelope-7 side track appraisal well
reached 1980 m MDRT and is drilling
ahead in the Orubadi Formation. The well
is designed to provide structural control
and reservoir definition on the field’s
western flank. It has a proposed total
depth of ~2300 m MDRT and is located
roughly 1.45 km west-south-west of
Antelope-5.
InterOil holds a 36.5375% interest
in the well. Total E&P PNG Limited has
a 40.1275% interest, Oil Search has
22.8350%, minority parties hold the rest.
Statoil completes sale of oilsands businessStatoil and Athabasca Oil Corporation have
completed the transaction whereby Statoil
has sold its entire oil sands operations
in the Canadian province of Alberta to
Athabasca.
The divestment includes the producing
Leismer demonstration plant and the
undeveloped Corner project, along with a
number of midstream contracts associated
with Leismer’s production. Statoil
has received CAN$431 million in cash
(following customary closing adjustments)
plus 100 million common shares in
Athabasca, representing just below 20% of
the equity in the company.
Up to a further CAN$250 million of
contingent payments will be paid out
over the next four years, depending on
production levels and the prevailing oil
price.
Last year, Athabasca sold a stake
in shale assets to Murphy Oil Corp. for
CAN$475 million to help fund development
of properties in Western Canada.
Subsea inspection service launched by Lloyd’s RegisterLloyd’s Register has launched its Subsea
Inspection Services to support underwater
inspections of subsea pipelines, assets and
facilities to energy companies operating
offshore.
Services include project management,
consultancy, personnel, quality control,
data processing and data management,
applicable to ROV, AUV and diver projects.
The services are headed by LR’s Subsea
Inspection Manager Andrew Inglis, and
delivered by the company’s in-house
experts in subsea inspection, survey and
asset integrity.
Inglis says: “LR has significant
capability and experience within the
subsea sector including management
of a wide range of offshore projects and
operations across the energy mix. By
uniting this expertise and experience
with our focus upon safety, quality and
cost-efficiency, we aim to be the preferred
subsea inspection management supplier
for our clients.”
Shell to sell North Sea assets for US$3.8 billionShell has agreed to sell a package of UK
North Sea assets to Chrysaor for a total of
up to US$3.8 billion, including an initial
consideration of US$3.0 billion and a
payment of up to US$600 million between
2018 - 2021 subject to commodity price,
with potential further payments of up to
US$180 million for future discoveries.
The package of assets consists of
Shell’s interests in Buzzard, Beryl, Bressay,
Elgin-Franklin, J-Block, the Greater Armada
cluster, Everest, Lomond and Erskine, plus
a 10% stake in Schiehallion.
The decommissioning costs associated
with the package are currently expected to
be US$3.9 billion, of which Shell will retain
a fixed liability of US$1 billion and Chrysaor
will assume the remaining liability.
The deal is subject to partner and
regulatory approvals, with completion
expected in the second half of 2017. The
transaction’s effective date is 1 July 2016.
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10 |
T he eff ects of the oil price collapse have been widely
published with headlines in the upstream sector oft en
containing themes of ‘Capex cuts’, ‘postponements
and cancellations’, ‘lower oil prices for longer,’ seemingly a daily
ritual. Yet amidst the unwelcome news over the past one and
a half years, comes a long awaited 1.2 million bpd supply cut
committed to by OPEC – an agreement which was reached on the
30 November 2016 following several futile meetings by the cartel.
While this early Christmas gift presents significant hope for the
wider oil and gas sector, the industry continues to go through an
extremely rough period. Douglas-Westwood estimates upstream
Capex declines of 35 and 14% in 2015 and 2016, respectively.
MICHELLE GOMEZ, DOUGLAS-WESTWOOD, PROVIDES AN OVERVIEW OF THE UPSTREAM INDUSTRY’S PROSPECTS IN ASIA.
| 11
12 | Oilfield Technology February 2017
As with the rest of the world, Asia has not been spared from the
realities of the oil and gas downturn. The region has seen divestments in
Asian E&P assets from the likes of Chevron and Murphy Oil. The services
sector has also been impacted and has witnessed the liquidation
of leading provider Swiber and Swissco fall in the red. Additionally,
headcounts have been reduced by some of the bigger industry names
such as Petronas and Keppel Shipyard amongst others. Exacerbating the
state of the industry are Capex cuts by end users Petronas and CNOOC
who have announced RM15 billion (US$3.4 billion) and RMB10 - 20 billion
(US$1.4 - 2.9 billion) cuts respectively, inevitably having a knock on
eff ect to the rest of the supply chain – service providers and equipment
manufacturers. However, while dark clouds loom, the industry should
not lose sight of a number of opportunities.
Accounting for 42% (BP’s Statistical Review) of energy demand,
Asia-Pacific (APAC) will continue to be the backbone of global
requirements. From a macro-economic perspective, the region’s
long-term demand fundamentals remain robust. China and India, the
region’s economic powerhouses, collectively account for 37% of the
global population and 28% of world energy consumption. Present
GDP growth rates are estimated at 6.9% and 7.6% and are expected to
remain positive in the foreseeable future. Continued positive growth
rates for key leading indicators (GDP and population growth) will drive
energy requirements, with BP expecting associated energy demand for
both China and India to reach nearly 5893 mtoe by 2035, a 61% increase
compared with the 2015 figure and an estimated 34% share of global
requirements. Looking at the region as a whole, APAC’s oil and gas
demand is estimated to grow by 37% and 73% respectively.
On a supply front, Asia’s hydrocarbon production accounted for
approximately 10% of global output in 2016 and is expected to increase
from the current 15.9 million boe/d to 17.3 million boe/d by 2022 (6%
growth), with gas accounting for all of this growth. Notably, recent
years have seen traditional hydrocarbon producers such as Malaysia,
Indonesia and Brunei challenged by oil production decline from mature
fields. Longer term, however, the region’s investments in off shore,
unconventional as well as deeper water plays are expected to off set the
decline, particularly in natural gas.
Over the next four years, more US$150 billion is expected to be spent
on off shore developments in APAC, contributing 38% of global off shore
expenditure. With activity expected to pick up as commodity prices gain
momentum, the following themes will characterise Asia’s upstream
development in the coming years:
NOCs have been and will continue to be key investors in upstream E&P field development programmesOver the next five years, 62% of fixed platforms, and 32% of
subsea tree installations in Asia will be accounted for by NOCs, the
majority of which will be rolled out by CNOOC, ONGC, Pertamina,
Petronas and PTTEP. Associated with NOC dominant countries are
protectionist measures and local content policies, which favour
local businesses/partners as well as vessel owners. This is unlikely
to change in the mid to long-term, unless an undersupplied market
surfaces. Markets such as Myanmar, which have less protectionist
measures in play, will in turn see significantly more IOC involvement.
Gas will take centre stageWhilst oil production is set to decline in all of the key Asian producers
over the next six years, gas output will see significant gains. The majority
of this gain will come from shallow water gas plays across the region as
E&P companies take advantage of gas- and LNG-hungry local economies.
Additionally, the five-fold increase in China’s recoverable shale gas
reserves, lift ing of sanctions in gas-rich Myanmar and the development of
India’s untapped gas market (whose development has been impeded by
economic viability and transmission infrastructure) supports anticipated
growth in gas output. China’s three NOCs currently have shale gas projects
operational and starting to produce notable volumes, though none are
at a stage of full commerciality. Gas consumption in APAC is anticipated
to grow by 73% by 2035, with LNG being a key enabler in facilitating
distribution. The shutdown of Japan’s nuclear reactors following the
Japanese Fukushima accident in 2011 saw associated LNG requirements
skyrocket. Japan is currently the largest buyer of LNG, accounting for
34% of global demand. The next largest buyer, South Korea, accounts
for 13% of global LNG demand. While the two North Asian countries
collectively import nearly half of the global total, associated requirements
are expected to weaken as both countries look to substitute to alternative
energy sources such as coal and nuclear – particularly in the case of Japan
as it looks to restart nuclear reactors shut-down in 2011. Despite this, an
anticipated growth in regasification import capacity (and consequently
an increase in LNG demand) in China and India are likely to cushion the fall.
Interestingly, on a country level, national strategies have evolved
to capitalise on the burgeoning gas market in the region. Singapore,
whilst not endowed with hydrocarbons, is positioning itself as a natural
gas hub, tapping into its favourable geographic position of being in the
centre of East Asian LNG-hungry nations and large LNG export centres
in the Middle East, South East Asia and Australasia. Presently with a
storage capacity of 800 000 m3, Singapore is looking to venture into LNG
bunkering as well as nitrogen blending of regasified LNG.
Whilst traditional Asian producers will remain, Myanmar has grabbed the headlinesTraditionally dominant producers in Asia such as China, Indonesia and
Malaysia are facing challenges in maintaining hydrocarbon output.
Acknowledging its plight, Malaysia has an economic transformation
programme (ETP) in place to revive its oil and gas sector through marginal
field development, rejuvenation of fields through enhanced oil recovery
(EOR) amongst other E&P and supply chain directed initiatives. Indonesia
has seen long-term production decline until recent production additions
from Banyu Urip in 2016. However, it will take more discoveries and
developments to delay further production decline given the maturity of its
fields. Myanmar, however, is attracting the limelight even in a depressed
macro-economic environment. Notably, the country has in recent
years attracted the attention of international players such as Shell and
Woodside. The latter made two significant deepwater gas discoveries this
year, one big enough to justify a fast-track to production within three years.
Growing competition amongst Asian nations expected Increasingly apparent is the intensifying competition amongst countries
for resources and business opportunities. The ongoing South China Sea
territorial dispute amongst Brunei, China, Malaysia, Philippines, Taiwan,
and Vietnam for the Paracel and Spratly island groups, has led to
underlying political tension. The shift ing of shipbuilding and subsea hubs
away from Singapore in favour of more cost competitive centres such as
China (for ship and rig building) and Malaysia (subsea clustering) creates
immediate rivalry amongst nations trying to compete for the same
volume of work.
The industry must continue to trim the corporate ‘fat’, align
business segments to best capitalise on the move to gas, deepwater and
unconventional production and simultaneously look to gain traction
in new or expanding Asian markets, whilst taking into consideration
potential protectionist measures. Where cost is no longer a diff erentiator
or an advantage, businesses/national strategies should be centred
on developing a niche or rather a unique selling proposition. Exciting
opportunities lie ahead but until this hurdle is overcome, market forces will
be ruthless in eliminating the uncompetitive.
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